May kicked off with Cipla Ltd., a major drug company, reducing costs of life-saving cancer medicines by 59 percent to 76 percent.
In March, the Indian Patent Office issued a compulsory license to sell another Indian drug maker Natco Pharma for selling a generic version of Nexavar, a kidney-cancer medicine made by German multinational Bayer Corporation. Bayer sells the branded medicine for Rs. 284,428 ($5300) per monthly dose. Natco Pharma set the cost at Rs. 8,800 ($165). Ahead of Pharma’s launch, however, Cipla announced its price for Rs. 6,840 ($128) down from Rs. 28,000 ($521). Bayer had already sued Cipla for patent infringement after it released a generic version of Nexavar in 2010.
Leena Menghaney, a lawyer with Médecins Sans Frontières, described this as a “launch at risk” strategy. Here, the company skips taking a license from the patent office but hopes, that if sued, it can prove the patent was granted for a frivolous reason. “It is a common practice all over the world,” she said.
If Cipla eventually loses, it could pay Bayer a heavy compensation. But Menghaney pointed out instances when courts have found generic drug manufacturers guilty of infringing patents, but still allowed them to continue selling on humanitarian ground after paying a royalty to original inventor, similar to a compulsory license.
Indian low-cost generic drugs, sold in poorest parts of the developing world, provide relief to people who can’t afford prices set by large pharmaceutical companies for patented medicines. Global companies see a big market in India but remain concerned about patent protection. Earlier this year, health activists opposed an EU-India trade pact, which they fear would strengthen the intellectual property regime, preventing local companies from manufacturing inexpensive drugs. (Read our report here.)
The granting of license to Natco, earlier this year, was a blow to pharmaceutical companies. Health activists see it as paving a way for more drugs been made affordable. But big drug companies say that there are millions of Indians who can afford high-costs for medicines that require money and research to make.
Around 40 percent of India’s 1.2 billion population lives below the poverty line. If a drug is not reasonably affordable for the public, the Indian Patent Office can issue a license to a company to make cheaper version after paying the patent holder royalty. Thailand has also previously issued a license for the production of a generic AIDS drug, which was patented by a U.S. company.
There are about 2.5 million cases of cancers diagnosed in India every year, according to the World Health Organization. “Drugs constitute a significant proportion of the overall cost of cancer treatment and reduction in costs can greatly relieve the burden, said Dr. Y. K. Hamied, Cipla’s Chairman. But many people still can’t afford these prices.
Health activists want the prices to go down further. “I am not sure whether cancer will even be an affordable disease,” said Jyotsana Govil from the Indian Cancer Society. “People sell their homes, their jewelry anything they can to pay for cancer treatment.”
S.Srinivasan from Lowcost Standard Therapeutics noted that there is “further scope in reducing costs by about 50 per cent.” Govil pointed out that generic medicine brought down HIV/AIDS medication from $50 a day to $1 a day.
India has 2.4 million HIV positive cases and estimated national prevalence remains below one percent, according to the U.N. Cipla, known for for slashing drug prices for HIV/AIDS treatment, appears to be doing the same for cancer. The company also reduced prices for generic brain tumor drug Temozolamide to Rs. 5000 ($93 for five capsules of 250 mg strength), Rs. 2400 ($45 for five capsules of 100mg) and Rs. 480 ($9 for five tablets of 20 mg). The original is British multinational AstraZeneca's Iressa.
The generic lung cancer drug Geftinib has been priced at Rs. 4250 ($79 for 30 tablets of 250 mg) down from Rs. 10,200 ($191). It was originally made by Schering_Plough, now merged with Merck & Co. based in New Jersey.
Prices could also come down through sheer domestic competition. Industry experts comment that Cipla’s slashing of costs could start a price war between manufacturers of generic medicines.
Low costs associated with generic drugs also raise concern about their quality. There still isn't a definitive answer to whether these are as good as the originals. Experts also differ.
Dr. D.C. Doval, an oncologist at the Rajiv Gandhi Cancer and Research Institute in Delhi, sees about 3-4 patients every month. Doval noted that generics have the same constituents as the patented formula but there has been little research on the potency and side effects of generic drugs.
Dr. Dinesh Sachan, a Kanpur-based oncologist, said there is no difference in the potency of generic versus the patented drug. But he added that sometimes manufacturing malpractices can negatively impact the potency of a drug.